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CUL
CUL
Cullinan - Acquisition Of Hylton Ross and further cautionary announcement
Cullinan Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1902/001808/06)
Share code: CUL & ISIN: ZAE000013710
("Cullinan" or "the company")
ACQUISITION OF HYLTON ROSS TOURS (PROPRIETARY) LIMITED ("Hylton Ross") AND
FURTHER CAUTIONARY ANNOUNCEMENT
1. Introduction
The board of directors of the company wishes to advise that Cullinan has entered
into an agreement with the vendors referred to in paragraph 3 below in terms of
which it will acquire 100% of the issued share capital of Hylton Ross ("the
acquisition"). The acquisition is subject to the conditions precedent set out in
paragraph 5 below.
2. Nature of business and rationale for the acquisition
Hylton Ross operates coaches and vehicles for hiring and charter in the domestic
tourist market. It also provides day tours in and around the Western Cape and
the Garden Route. It is a well-established brand and enjoys a substantial market
share in the Western Cape. It is soundly managed and profitable.
The acquisition is in line with Cullinan"s commitment to grow its portfolio of
travel interests, both domestically and internationally. It increases the
company"s investment in tourism in the important Western Cape market, which
continues to offer growth in passenger numbers from both international and local
sources. Hylton Ross will continue to operate independently under the current
management team and the leadership of Claus Tworeck ("Tworeck").
3. The acquisition
Cullinan has, subject to the conditions precedent referred to in paragraph 5
below, acquired Hylton Ross from Messrs. Tworeck and David Munton for a
consideration of R31 million (comprising net assets of R16,65 million and
goodwill of R14,37 million) to be settled in cash.
The effective date of the acquisition is 1 September 2005.
The agreement between the parties contains warranties that are usually found in
agreements regarding transactions of this nature.
4. Financial effects of the acquisition
The table below sets out the financial effects of the acquisition on the
earnings, headline earnings, net asset value and net tangible asset value per
share in Cullinan based on the audited financial statements of the company for
the financial year ended 30 September 2005. The financial effects are the
responsibility of the directors of Cullinan and are prepared for illustrative
purposes only. Because of their nature, the financial effects may not fairly
present the financial position of the company, changes in equity, results of its
operations or cash flows after the acquisition.
Before After Change
the the increase/
Notes acquisition acquisition (decrease)
(cents) (cents) %
Earnings per share 1 2,12 2,58 21,70
Headline earnings per share 1 2,47 2,94 19,03
Net asset value per share 2 8,52 8,52 -
Net tangible asset value per share 2 3,32 1,32 (60,24)
Number of shares in issue ("000) 718 188 718 188 -
Notes:
1. On the assumption that the acquisition was effective throughout the financial
year ended on 30 September 2005. In calculating these effects, goodwill has not
been amortised and will be subject to an annual impairment test.
2. On the assumption that the acquisition was effective on 30 September 2005.
5. Conditions precedent
The acquisition is subject to fulfilment or waiver of the following conditions
precedent:
- approval of the acquisition by the Competition Commission insofar as this may
be necessary; and
- an agreement being concluded with Tworeck on acceptable terms and conditions
in regard to his continued relationship with Hylton Ross and Cullinan.
6. Further cautionary announcement
Shareholders are advised that Cullinan is still conducting discussions that may
have an effect on the share price and shareholders are accordingly urged to
exercise caution in trading in their shares until a further announcement in this
regard is made.
By order of the board
Johannesburg
21 April 2006
Corporate adviser
LANARK FINANCIAL SERVICES
Attorneys
MALLINICKS ATTORNEYS
Sponsor
LPC MANHATTAN MOELA (Pty) Ltd
(Registration number 2001/009215/07)
Date: 21/04/2006 05:05:16 PM Produced by the JSE SENS Department
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